The best advice we could ever give any investor is to make sure that you do your homework.\u00a0In today’s show\u00a0Josh Masters<\/b>, from\u00a0BuySide.com,\u00a0tells us where we can go wrong when researching a market or a property.
\n <\/p>\nTranscript:<\/h4>\n
Kevin:\u00a0 <\/b>The best advice we could ever give any investor is to make sure that you do your homework. But just doing your homework doesn\u2019t necessarily mean to say you\u2019re going to buy the best property. Let\u2019s have a look at where some people go wrong with their researching when they\u2019re looking at either a market or at a property. A man who is experienced with this is Josh Masters from BuySide.com. Kevin:\u00a0 <\/b>Let\u2019s have a look at couple of those, if you don\u2019t mind. It\u2019s one thing to know that they\u2019re things you could look for, but what is that you\u2019re looking for in<\/i> those stats? In other words, for instance on days on market, what would you be looking for there? Maybe explain to us what that really means. The best advice we could ever give any investor is to make sure that you do your homework.\u00a0In today’s show\u00a0Josh Masters, from\u00a0BuySide.com,\u00a0tells us where we can go wrong when researching a market or a property. Transcript: Kevin:\u00a0 The best advice we could ever give…<\/p>\n","protected":false},"author":176692471,"featured_media":4322,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,25],"tags":[101],"class_list":["post-4321","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-sponsored-channels","tag-podcast"],"yoast_head":"\n
\nHe joins us. Good day, Josh. I haven\u2019t spoken to you for a while, but it\u2019s nice to have you back on the show.
\nJosh:\u00a0 <\/b>Thanks, Kevin. It\u2019s nice to be here.
\nKevin:\u00a0 <\/b>Now, where in your experience do people go wrong with their researching?
\nJosh:\u00a0 <\/b>We really take a top-down approach to research. We start with the area and then look at the property. In terms of looking at the area for research, I find most people really base their findings off opinion rather than facts and figures. They\u2019ll be standing around the barbecue or they\u2019ll talk to a friend and they\u2019ll get their opinion on where they should be investing rather than really looking at the data and the research that comes out.
\nThere are a couple of key indicators that we look at that are quite critical that anybody can find, and most of them are free. But here are some of the probably key ones that I would look at:<\/p>\n\n
\nJosh: \u00a0<\/b> Absolutely. That\u2019s an excellent question. Basically, it really falls down into a risk or reward component. Now, days on market is a risk component. It measures risk. What I mean by that is a lot of my clients put their money into a property market and they don\u2019t want to risk it; they don\u2019t want to lose it because they worked very hard to get it.
\nNow, if they\u2019re invested in five properties and they get into financial trouble and they need to sell one of those properties off, property is quite an illiquid asset. That means it takes quite a long time to get that money back out of the marketplace. It\u2019s not like a share where you can just sell it today and it\u2019s transacted in a second.
\nWhat we want to do by measuring days on market is find how quickly that property would take to sell if they need it to. Now in a lot of the metro areas, you\u2019ll find days on market could be anywhere between 30 and 45 days, which means if you go to auction, it\u2019s selling almost before it gets to auction date, and it could also sell within the first couple of weeks.
\nNow if you go regional, you might be looking at 120 days plus, which means if you\u2019re in financial trouble and you need to sell one of those little pieces off or those little properties off, it can often take months to really get your money back out of the market, and by then, it could be too late.
\nKevin:\u00a0 <\/b>Yes, you could sell it quicker if you sacrifice the price. But that defeats the purpose of it, doesn\u2019t it?
\nJosh:\u00a0 <\/b>Absolutely. Yes, it does.
\nKevin:\u00a0 <\/b>Yes, it does indeed. That\u2019s one of the keys. Some of those other ones you mentioned, as well. I can understand the importance there of days on market. What are some of the other indicators for you, and how do you monitor them?
\nJosh:\u00a0 <\/b>Vacancy rates is another one that we look at. That\u2019s often a good indicator of supply in the area. To give you an example, you can go onto SQM\u2019s website and look at this information for free. You can look up a suburb, and you can actually track over time the vacancy rates for that suburb.
\nNow, if vacancy rates are trending upwards, which means there tends to be more vacancy in that area, that tells me that there\u2019s probably an increasing supply of units or developments coming onto market, the market isn\u2019t absorbing them or demanding them as strongly as it has been in the past, and as a result, you have a lot more vacancy or lack of tenants in the area than you did before.
\nFor us, that is also a risk component. It does indicate the demand in that area. Now, over time that may get absorbed, but I don\u2019t want to buy into an area that\u2019s on the incline for vacancy rates, as an example.
\nKevin:\u00a0 <\/b>That\u2019s a very good explanation there. That website you mentioned, SQM, is SQMResearch.com.au if you want to go and get those stats. That\u2019s Louis Christopher. He\u2019s also a good friend of ours as well, Josh.
\nJosh:\u00a0 <\/b>He\u2019s a good man.
\nKevin:\u00a0 <\/b>Yes, he\u2019s a very good man. It\u2019s been great talking to you again. I\u2019d love to have you back on the show again in the next few weeks. Thank you. You\u2019ve been a great help in helping us research the marketplace and the property. Thanks again, Josh.
\nJosh:\u00a0 <\/b>My pleasure, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"